Top 10 Things They’re Not Telling You About Paid FMLA: Part I
If it sounds too good to be true, it probably is.
Polls conducted by advocates of mandated paid family and medical leave show the average person, when told nothing of its costs or other implications, thinks it’s a good idea for Connecticut.
This is not surprising as nobody would turn down a new benefit they believe is free.
SB 1 and HB 6212, the two paid FMLA bills in the General Assembly, allow any worker at a company with two or more employees to receive up to 12 weeks of paid leave each year, at 100% of pay (capped at $1,000 per week) for their own or a family member’s illness.
However, those pushing for paid FMLA hope Connecticut citizens will be so enamored by the new mandate they won’t see its hidden massive costs until after it’s enacted.
CBIA and representatives from more than 70 business organizations and chambers of commerce are adamant that such a program is bad for businesses, bad for employees, and bad for taxpayers.
Over the next two weeks, we will reveal the top 10 things about the proposed paid FMLA program that advocates are not telling you:
10. Employees can use paid leave beginning their first day on the job. That’s right—employees are eligible for up to three months of leave each year provided they have earned at least $2,325 from one or more employers in the last five calendar quarters.
That means a business owner, after weeks of searching for a person to fill a vacancy, could discover the new hire is giving them notice on the first day at work that he or she plans to be out for the next three months.
As long as the employee earned enough at a previous job, there’s nothing their new employer can do to stop them. Meanwhile, the employer continues to pay any promised non-wage benefits while the employee is on leave.
9. You don’t need to be employed to get paid FMLA. Having a job is not required to collect these benefits. You only need to have earned $2,325 in the last five calendar quarters.
Therefore, a situation could arise where an employee is laid off. At that time, the employee also decides to get an overdue medical procedure.
Despite having no job, the person could apply for paid FMLA and get three months of pay to recover. Once medically fit, they can then apply for 26 weeks of unemployment.
Is there any other payroll tax with a fluctuating rate that allows the state to keep collecting until it has enough?
SB 1 and HB 6212 dramatically expand the list family members whose illnesses would be covered, allowing an employee to take paid leave for the illness of a grandchild, grandparent, parent-in-law, and siblings. This vastly increases the opportunities for employees to take leave from their jobs, or even several family members taking leave to care for the same person.
That means exponentially more workplace disruptions for employers.
7. Paid leave will cost a lot more than half a percent of employee wages. This is the number often cited by advocates as the amount needed to make the paid FMLA program self-sustaining.
Basic math, however, shows the opposite. An individual making $52,000 a year would be eligible to collect up to $12,000 in paid FMLA benefits each year, yet would only contribute $260 per year.
At that rate, one person taking leave would need the contributions of 47 employees , which doesn't even include the program's operating costs.
That means the program is financially unsustainable from the moment it's enacted.
Advocates are silent on this, leading to the expectation the state will need to take more of an employee's wages to keep the program solvent. This is perhaps the reason a set contribution rate has not been into the law. That percentage is to be determined.
Is there any other Connecticut payroll tax that has a fluctuating taxation rate that allows the state to keep collecting until it has enough?
6. You will be required to share medical information with the state. Under current law, if you need to use unpaid family medical leave, you typically inform your employer, who provides a certification to be filled out by a doctor. The medical information in that certification never gets beyond your employer.
SB 1 and HB 6212 change that dynamic, and require you to submit your medical certifications to the state in order to get paid leave approved. These certifications often contain information about your diagnosis, including any medical limitations and treatments.
This information will likely be handled and viewed by multiple state employees in charge of administering the paid FMLA program—meaning many people will have access to your medical information, increasing the likelihood of a data breach or HIPPAA violation.
There are at least five more chilling—and costly—facts about paid FMLA that advocates never tell you.
Check back next week for more.
For more information, contact CBIA's Eric Gjede (860.480.1784) | @egjede
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